by Houghton and Atkeson 06/23/08
Q: What are the benefits of trading options?
A: Options can be used for speculation or for insurance for a long stock position. You can buy calls and puts without having to own the underlying shares on a bet that the stock will go up or down. And if you own the underlying stocks or other commodities, then you can buy or sell options to generate additional income or to control risk. Similarly, if you need to buy an asset in the future, you can buy an option to lock in a price and then purchase the stock at the pre-determined price (the strike price) during the life of the options contract.
Dawn Pennington
Read This Before You Buy Another Stock
A savvy stock position can start with a single options trade.
This technique can help you breathe a sigh of relief as it aims to relieve a 'choking' portfolio.
If you are familiar with buying calls and puts, we'll show you how to buy them even cheaper.
Anatomy of a Stock Option Ticker
Option tickers may look like a bowl of alphabet soup to you, but each letter means something.
You don't have to short stock to put a bearish bet on the table -- but the path to profits comes with different levels of risk.
